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This Week at the SCC (08/03/2013)

A Commentary on Recent Legal Developments by the Opinions Group of McCarthy Tétrault LLP

Posted in This Week at the SCC
Martin Boodman

This week, the Supreme Court of Canada rendered a decision that provides a legal framework for injurious affection and nuisance claims resulting from the activity of a public authority. The court also granted leave applications in relation to the claim of an equity partner in a law firm that forced retirement at age 65 is discriminatory, and an appeal which challenges the constitutionality of foreign state immunity.

Injurious Affection/ Nuisance

In Antrim Truck Center Ltd. v. Ontario (Transportation), 2013 SCC 13, the Supreme Court of Canada identified the elements of a claim for injurious affection which, in the instant case, arose because the construction of a highway by Ontario significantly impeded access to the claimant’s land, causing a business loss and loss in the market value of the land.

Under the Ontario Expropriation Act, R.S.O. 1990, c. E. 26, compensation is available where the damage results from action taken under statutory authority, the action would give rise to liability but for the fact that it was taken by a statutory authority and the damage results from the construction rather than the ultimate use of the work. The primary analysis of the decision relates to the second criterion.

The “actionability” of the public authority’s conduct is a matter of applying the law of private nuisance. A claim in private nuisance requires interference with the use or enjoyment of land that is substantial and unreasonable. Each of these elements must be considered separately as part of a two-step process, despite some overlap in this regard. Other than indicating that the interference must be “non-trivial”, the court does not identify indicators of substantial interference which is fact specific.

The criterion of unreasonableness is a matter of determining “whether the interference is greater than the individual should be expected to bear in the public interest without compensation”. This is a matter of weighing the gravity of the interference against the utility of the public authority’s conduct. The Supreme Court repeats at several points in its decision that a public purpose does not by its nature always outweigh very significant interference. The court must take into account all of the relevant circumstances including without limitation, the severity of the interference, character of the neighbourhood, utility of the defendant’s conduct and the sensitivity of the claimant. The purpose of the analysis is to determine whether the interference is unreasonable and not whether the defendant’s conduct is unreasonable. In this context, the purpose is “to ensure that individual members of the public do not have to bear a disproportionate share of the costs of procuring the public benefit”. The issue is whether the interference is a cost that should be borne by the public generally or should be accepted by the individual as a cost of living in organized society.

The Supreme Court of Canada expressly states that the criterion of unreasonableness must be considered whether the interference is characterized as material or physical damage or as a loss of amenities or use.

In the instant case, the Supreme Court of Canada reinstates the order for compensation because the construction of the provincial highway effectively closed the route on which the claimant’s truck stop was located and put it out of business.

Leave Applications Granted

In Michael McCormick v. Fasken Martineau Dumoulin LLP, 2012 BCCA 313, an equity partner in the defendant law firm filed a complaint with the BC Human Rights Tribunal alleging that forced retirement at age 65 was contrary to a statutory prohibition against discrimination in employment on the basis of age. The BC Court of Appeal decided that the Human Rights Tribunal did not have jurisdiction, holding that an equity partner is not an employee of the partnership. The appeal to the Supreme Court of Canada will consider the interpretation of the BC Human Rights Code and the nature of partnerships.

In Estate of the late Zara Kazemi v. Islamic Republic of Iran, 2012 QCCA 1449, the Estate of Kazemi and her son pursued Iran and several individual defendants for damages resulting from Kazemi’s arrest, detention, torture and death in Iran. All of the defendants successfully invoked the State Immunity Act, R.S.C. 1985, c. S-18. Further, the Quebec Court of Appeal held that the relevant parts of the State Immunity Act were not inoperative or invalid under the Canadian Bill of Rights or Canadian Charter of Rights and Freedoms. The Supreme Court of Canada will consider these issues which will inevitably provide an analysis of the scope of application of the State Immunity Act and its interaction with Canadian human rights legislation.